March 16, 2005

NYC Should Buy the Jets

It's a real low for the NFL to help one of its franchiseees extract corporate welfare from a host city by dangling a Super Bowl in front of New York City fans.

The Jets want the City to help it build a $1.7 billion stadium. The deal would cost the city not just money up front but lost revenue from giving the Jets land at far below market value.

The solution is obvious: if the Jets want the City to invest, the City should get an ownership stake, so that any profits flowing from the new location go to taxpayers. And such an ownership stake -- which could easily be the whole franchise, given that the Jets franchise was only valued at $537 million in 2003 -- would give the city the leverage to make sure the team doesn't take the City money today, then run somewhere else a few years down the line if a better deal appears.

Only one problem. The NFL bars its franchisees from selling a team to a local government, a nice little ploy to prevent cities from demanding sale of equity in exchange for any local subsidies. Which is a perfect argument for eminent domain of local teams, a bit more complicated in the case of the Jets since they are currently located in New Jersey, but something other cities like Oakland have considered in the past.

The basic question is why a city should invest its funds in a private enterprise without demanding the same equity stake as any other investor?